Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Event-Driven

<ul>
<li>The possible merger between Welcia and Tsuruha under Aeon has been talked about for years despite concerns from both drugstores, but may now happen.</li>
<li>But calling these retailers drugstores is increasingly a misnomer: FMCG-drugstores is better because they and many others in the sector, increasingly compete with FMCG retailers like supermarkets and even CVS.</li>
<li>This evolution is rapid so the merits of a deal make more sense when we view it from a sector five years in the future than how it is today.</li>
</ul>


The possible merger between Welcia and Tsuruha under Aeon has been talked about for years despite concerns from both drugstores, but may now happen.
But calling these retailers drugstores is increasingly a misnomer: FMCG-drugstores is better because they and many others in the sector, increasingly compete with FMCG retailers like supermarkets and even CVS.
This evolution is rapid so the merits of a deal make more sense when we view it from a sector five years in the future than how it is today.


Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

Equity Bottom-Up

<ul>
<li>Tsuruha is the latest retailer to come under attack from an activist investment fund. </li>
<li>As with Seven &amp; I, the company fended off demands to shake up its board, crucially with the support of Aeon, its largest stakeholder.</li>
<li>The move will likely lead to some careful reconsideration of how Tsuruha and Aeon could work together and may even lead to a Welcia/Tsuruha merger.</li>
</ul>


Tsuruha is the latest retailer to come under attack from an activist investment fund. 
As with Seven &amp; I, the company fended off demands to shake up its board, crucially with the support of Aeon, its largest stakeholder.
The move will likely lead to some careful reconsideration of how Tsuruha and Aeon could work together and may even lead to a Welcia/Tsuruha merger.


Activists May Be Pushing Tsuruha Towards a Merger with Welcia

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Over the weekend there was an article in the Nikkei saying that <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> and <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> were considering a merger. Other media outlets followed.</li>
<li>This has been a possible outcome. <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> owns 51% of Welcia, 13.6% in Tsuruha, and is negotiating to buy another 13% in Tsuruha from Oasis.</li>
<li>This would create a behemoth. ¥2.2trln in revenues vs ¥1trln for <a href="https://www.smartkarma.com/entities/matsukiyococokara-co" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">MatsukiyoCocokara (3088 JP)</a>. It would be 25% of the market. Questions will be asked about concentration. </li>
</ul>


Over the weekend there was an article in the Nikkei saying that Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) were considering a merger. Other media outlets followed.
This has been a possible outcome. Aeon Co Ltd (8267 JP) owns 51% of Welcia, 13.6% in Tsuruha, and is negotiating to buy another 13% in Tsuruha from Oasis.
This would create a behemoth. ¥2.2trln in revenues vs ¥1trln for MatsukiyoCocokara (3088 JP). It would be 25% of the market. Questions will be asked about concentration. 


Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

<ul>
<li>Retail media in its traditional sense is nothing new, simply referring to the use of advertising in stores, but in modern terms retail media is something far, far bigger. </li>
<li>It is not only a trend in the US, but one that is about to explode in Japan – although in a very different format.</li>
<li>With purchase rates up two-fold in early experiments, the potential for brands advertising through retail stores will be significant with some estimates suggesting a ¥20 trillion market.</li>
</ul>


Retail media in its traditional sense is nothing new, simply referring to the use of advertising in stores, but in modern terms retail media is something far, far bigger. 
It is not only a trend in the US, but one that is about to explode in Japan – although in a very different format.
With purchase rates up two-fold in early experiments, the potential for brands advertising through retail stores will be significant with some estimates suggesting a ¥20 trillion market.


Retail Ads: A New Revenue Stream for Seven & I and Rival Convenience Stores

David Blennerhassett

<ul>
<li>
<a href="https://www.smartkarma.com/entities/s-m-entertainment-co" target="_blank" data-smartkarma-citation="entities:3500:1" rel="noopener">S.M.Entertainment Co (041510 KS)</a> is trading through the partial offer terms as <a href="https://www.smartkarma.com/entities/hybe-co-ltd" target="_blank" data-smartkarma-citation="entities:28959:1" rel="noopener">HYBE (352820 KS)</a> and <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a> jostle for control.</li>
<li>The political noise around the Adani Group situation will continue to be significant. Part of India believes this is a hatchet job against PM Modi and the BJP.</li>
<li>
<a href="https://www.smartkarma.com/entities/star-entertainment-group-ltd" target="_blank" data-smartkarma-citation="entities:926:1" rel="noopener">Star Entertainment Group (SGR AU)</a> is an extraordinarily toxic company. But just how much negative news is already baked into the share price?</li>
</ul>



S.M.Entertainment Co (041510 KS) is trading through the partial offer terms as HYBE (352820 KS) and Kakao Corp (035720 KS) jostle for control.
The political noise around the Adani Group situation will continue to be significant. Part of India believes this is a hatchet job against PM Modi and the BJP.

Star Entertainment Group (SGR AU) is an extraordinarily toxic company. But just how much negative news is already baked into the share price?


Last Week in Event SPACE: S.M.Entertainment, Adani Group, Star Entertainment, Dai Nippon, Citizen

Japan

MatsukiyoCocokara & Co. operates drug store chains. The Company retails medicines, cosmetics, health foods, beauty care products, and other products. MatsukiyoCocokara & also operates supermarkets and home centers.

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MatsukiyoCocokara (3088 JP)

Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...

Michael Causton

Activists May Be Pushing Tsuruha Towards a Merger with Welcia

This insight from last September looked at the likelihood of a merger attempt by Aeon between Welcia and Tsuruha. The reasons for this are similar...

Michael Causton

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

Over the weekend we have news suggesting Aeon is pushing Tsuruha and Welcia towards a merger after buying Oasis' Tsuruha stake. Both stocks are up....

Travis Lundy

Retail Ads: A New Revenue Stream for Seven & I and Rival Convenience Stores

Japanese convenience stores have reached stagnation so new sources of revenue to support same-store growth are key. And they may have found it:...

Michael Causton

Last Week in Event SPACE: S.M.Entertainment, Adani Group, Star Entertainment, Dai Nippon, Citizen

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

​Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...

Michael Causton

Activists May Be Pushing Tsuruha Towards a Merger with Welcia

This insight from last September looked at the likelihood of a merger attempt by Aeon between Welcia and Tsuruha. The reasons for this are similar...

Michael Causton

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

Over the weekend we have news suggesting Aeon is pushing Tsuruha and Welcia towards a merger after buying Oasis' Tsuruha stake. Both stocks are up....

Travis Lundy

Retail Ads: A New Revenue Stream for Seven & I and Rival Convenience Stores

Japanese convenience stores have reached stagnation so new sources of revenue to support same-store growth are key. And they may have found it:...

Michael Causton

Last Week in Event SPACE: S.M.Entertainment, Adani Group, Star Entertainment, Dai Nippon, Citizen

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...